UPDATE 1-Kuwait's KIPCO says to merge pay TV unit with Orbit

* KIPCO agrees to merge pay tv unit with Saudi group

* Does not give value for deal

(Adds details, background)

KUWAIT, July 12 (Reuters) - Investment firm Kuwait Projects Co (KIPCO) (KPRO.KW) said on Sunday it had agreed to merge its pay-television subsidiary Showtime Arabia with Orbit Group, a unit of a Saudi Arabia Mawarid Group.

Showtime Arabia is owned by Gulf DTH, a joint-venture between KIPCO and U.S. media conglomerate Viacom (VIAb.N).

"The new company is a partnership between the Orbit Group, a member of the Riyadh-based Mawarid Group, and Showtime Arabia," KIPCO said in a statement without giving the value of the deal.

KIPCO, which has stakes in 50 companies and operates in 21 countries, owns a 75.3 percent of Showtime Arabia, It has said previously that it was in talks with media firms to merge the unit, which might be floated later.

KIPCO, which controls assets worth $19 billion, had planned to offer shares to the public in Showtime Arabia in 2006 but postponed the plan, citing a downturn of Arab markets.

Shares of KIPCO were down 1 percent on Sunday, while Kuwait's main index .KWSE ended slightly higher 0.04 percent. (Reporting by Rania El Gamal; editing by Karen Foster)